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No More Rounding of Punches for Lunches?

May 3, 2021

Originally published in the Connecticut Law Tribune on May 3, 2021

As technology advances many employers now use electronic timekeeping systems to track employees’ hours. Often times these systems use rounding software to adjust the time shown that an employee works to the nearest five or ten-minute time increment. Unfortunately for California employers, technology is not always deemed to be a good thing, as late last month the Supreme Court of California ruled in Donohue v. AMN Services, LLC (“Donohue”) that (1) employers are not permitted to round the time employees take for meal breaks and (2) any time records verifying non-compliant meal breaks can be used as a rebuttable presumption a meal break violation occurred. As one can imagine, the court’s ruling in Donohue has created a major issue for California employers using electronic timekeeping software which has been programmed to round time taken by employees for meals. 

Could this ruling eventually impact employers outside of California? As we have written previously, the Biden administration and the Democratic congress are strongly in support of adding protections to workers’ rights, so chances are such a change could be coming to a state near you either in the form of new federal legislation or state law.

In California, employees are entitled to a 30-minute break for meals. Meal breaks need to occur no later than by the end of the fifth hour the employee worked. While an employer needs to provide an opportunity to take the meal break, the employer is not required to make sure the break is actually taken. In other words, if an employee voluntarily elects not to take his or her meal break, then it will be determined that no meal break violation occurred.  While on the other hand, if it is determined an employer has failed to provide a meal break and the employee has not voluntarily waived his right to one, then the employee is entitled to receive a “premium wage” equal to one additional hour of pay at the employee’s regular rate of pay.

In Donohue, the plaintiff, Kennedy Donohue, worked as a nurse recruiter for AMN Services, LLC (“AMN Services”). Ms. Donohue argued that her employer’s use of an electronic timekeeping system which rounded time punches to the nearest 10-minute interval for meal breaks was in violation of California’s meal break law.  For example, if an employee clocked out for her meal break at 11:02 AM and clocked in at 11:25 AM, the system would record the meal period as 11:00 AM and 11:30 AM.  The system recorded that a meal break of 30 minutes was taken when the break was actually only 23 minutes! Despite AMN Services’ argument that its rounding policy was proper and therefore it did not need to pay a “premium wage” for the shorter break period, the court ruled the meal break laws of California were designed with “precise time requirements” in mind and that permitting employers to round was inconsistent with the purpose of those laws.

The court further reasoned that the purpose of the law was to provide employees with complete and timely meal breaks, which was necessary to protect employee’s health and well-being, not for the purpose of protecting employees’ wages. This last point was an important distinction as the court used it to reason that the company’s rounding policy was in contradiction with the legislative intent of the law because shorter meal breaks on one day should not be offset with a longer meal break on a different day. 

The second piece of the supreme court’s ruling was the decision that an employee’s time record which demonstrates a non-compliant meal period will raise a rebuttable presumption of a meal break violation at summary judgment. The court stated employers are able to defeat such a presumption by providing evidence that the employee was either (1) paid for the non-compliant meal break time or (2) had been offered a compliant meal break but chose to work instead. This “rebuttable presumption” ruling puts all California employers on notice that they need to provide employees with a way to precisely record their meal breaks.

Whether employing employees in California or elsewhere, in the wake of the Donohue decision, employers should review their time keeping procedures being used to measure break time for meal periods.  Although the Donohue decision only applies to employers in California, it could be referenced as a better practice for employers and could lead to greater employee satisfaction.  What remains to be seen is whether this new California ruling will lead to prohibitions against rounding for all break periods, as well as start and end times, and whether the California’s supreme court decision will be adopted by other states.

Brody and Associates regularly advises management on complying with the latest state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.